Strategic Expansion in the Florida Market

Planet 13 Holdings’ recent acquisition of VidaCann for $63.4 million in May 2024 has set the stage for the company’s ambitious growth plans in the Sunshine State. The move not only positions Planet 13 to broaden its presence in Florida but also signals its readiness to tap into the potential unleashed by potential recreational cannabis legalization by mid-2026. The acquisition opens paths for the opening of six additional stores by the year-end, three of which are already in the pipeline, including a flagship store in Ocala. The transformation of all VidaCann outlets under the Planet 13 umbrella and the introduction of new product lines like HaHa edibles are central pillars of this expansion blueprint.

Performance Metrics and Growth Forecasts

Snapshot of operational metrics: In the second quarter of 2024, VidaCann’s outlets recorded a remarkable upsurge of 120% in flower sales per store, averaging at 1.86K ounces. Yet, these figures still trail the state average of 2.34K ounces. Similarly, extract volumes surged by over 30% year-on-year to 3.26 million milligrams, though they too lag behind the state’s average of 7.06 million milligrams. As per Zuanic’s projections, the 32 Florida stores could churn out a combined annual revenue surpassing $70 million by year-end, provided the current 25% performance gap relative to the state average is bridged.

Financial Prospects and Valuation in the Market

An anticipatory perspective on finances: Zuanic’s analysis hints at Florida emerging as a catalyst for both top-line and bottom-line growth for Planet 13. Operating with gross margins hovering around 50% in Florida, the company anticipates efficacy gains through operational enhancements. If Florida transitions to recreational cannabis by July 2026, Planet 13’s sales could soar, aiming at a $225 million annual sales trajectory by the close of 2026. Driven by a presumed 20% EBITDA margin and a 10x EBITDA multiple, this forecast could vault the enterprise value to $450 million, translating to a prospective share price of $1.30, indicating a potential to more than double the current valuation.